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Thailand: Thai Market Strategy - Discussion with Dr Kobsak

  • 1# What is the likely timing of the Fed’s final big rate hike?

  • 2# How high an FFR can the US stand?

  • 3# If US GDP shrinks for a third straight quarter is it in recession?

Thailand: Thai Market Strategy - Discussion with Dr Kobsak
Poramet Tongbua
Poramet Tongbua

Equity Research Analyst

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Bualuang Securities
14 September 2022

Yesterday, we hosted a virtual conference with Dr Kobsak Pootrakool, chairman of the Federation of Thai Capital Market Organizations (FETCO) and an SEVP and executive committee member of BBL. He shared his views on nine key questions regarding economics and geopolitics. The key takeaways from the meeting are summarized below:

1# What is the likely timing of the Fed’s final big rate hike?

The US Federal Reserve’s battle against rising prices could extend into 2H23 or later, Dr Kobsak believes. The Federal Funds Rate (FFR) could peak at 4.5-5% (it’s currently 2.25-2.5%) and might remain high for 6-12 months after peaking until the Fed is confident that it has beaten down core inflation to its target range of 0-2%. He believes big rate hikes (50-75bps) will continue until the headline inflation rate falls to 5-6%.